Berliner Boersenzeitung - DoorDash shares rise as Instacart slips following $17 billion takeover plan

Doordash Inc. stock price at the US stock market jumped nearly three% on Thursday whereas Instacart share price at the Wall Street fell. Doordash Inc. or DASH stock price at Nasdaq was up by 2.96% or 5.01 points to USD 174.50. Instacart or CART share price at Nasdaq fell 0.86% or 0.50 points to USD 57.92.

Both Instacart and Doordash stocks experienced different fortunes after two companies have gone for a mega grocery delivery deal. DoorDash is offering $17 billion to buy Instacart to supercharge its grocery delivery business in what would be a big consolidation in grocery delivery. DoorDash-Instacart Deal DoorDash will pay $65 per Instacart share, a 26 percent premium to the stock’s closing price on October 22, the last trading day before media reports of a possible deal, the company said in a statement.

DoorDash said the Instacart brand name and app will remain, and Instacart shoppers would be able to continue fulfilling orders as before. Grocers can also choose to work with Instacart or DoorDash. Instacart customers will now have access to 50,000 additional stores covered by DoorDash, the company said.

Instacart shareholders can choose cash, DoorDash stock or a mix of the two, though stock will make up no over a quarter of the total payout. The transaction is projected to close at the end of 2027 or in the first half of 2028, pending shareholder approval and regulatory clearance in the United States, Canada and Israel. All About DoorDash and Instacart DoorDash, founded in San Francisco in 2013, began as a restaurant delivery business but has expanded to pet food and electronics.

Operating in 40 countries, it completed over 3 billion orders last year using a network of 9 million independent delivery workers. It has a market value of $73 billion. DoorDash began delivering groceries in 2020 against a backdrop of a surge in pandemic-era demand.

Grocers were initially cautious. Kroger partnered with the San Francisco company in 2022 but initially allowed the company to deliver only flowers, sushi and prepared meals from a limited number of stores. The partnership with one of the nation’s largest grocery chains expanded last fall, and DoorDash now lists the full inventory of all 2,700 U.S.

Kroger stores in its online marketplace. DoorDash scored another coup last month when it added delivery from Costco. Separately, Instacart, founded in 2012, specializes in grocery and convenience store delivery in the U.S. and Canada.

Its 600,000 “shoppers” — who are independent contractors — completed 338 million orders last year, as reported by company filings. Instacart has a market value of $14 billion. DoorDash vs Instacart DoorDash’s aggressive market-share gains by have hurt Instacart.

Five years ago, Instacart commanded 26% of spending on U.S. delivery platforms; that share has fallen to 18%, as reported by Consumer Edge, a market research company. DoorDash’s share grew from 44% to 59% in that same period. Uber Eats’ share held steady at just under 20%.

DoorDash revenue rose 34 percent from a year earlier to $4.6 billion in the July-September quarter, while net income jumped 91 percent to $466 million, or $1.06 per share. Orders grew 28 percent to 993 million, lifted by the acquisition of British delivery service Deliveroo last year.

(U.Gruber--BBZ)